While talks between both sides are at a preliminary stage, Reliance Industries is playing hard to amid internal debates on how and when to launch services.

The negotiations are largely over pricing with RIL striking a hard bargain, two executives aware of the development said.

If a deal eventually happens, it is likely to involve RIL leasing capacity on 30,000 out of the 48,000 towers held by Reliance Infratel, the infrastructure arm of Reliance Communications. But any such deal may be at a heavily discounted rate, they said.

RCOM shares surged 7% on Monday to close at Rs80, its highest since April 18, 2012, after brokerage CLSA said that a tower sharing deal with RIL for the latter's 4G rollout was inevitable. "Reliance Industries is the only pan-India 4G spectrum owner.

Service rollout is reported to be in 2013 and its best option remains to lease towers from Reliance Infratel," said CLSA in a report. E-mails sent to both Reliance Industries and Reliance Communications went unanswered.

In early 2011, RIL had approached independent tower companies seeking to lease electronic equipment to transmit airwaves for its 4G, or fourth generation, mobile technology services.

At the time, the Mukesh Ambanipromoted company had sought to lease towers at Rs19,000 a month, compared with an ongoing rate ofRs24,000 to Rs31,000.

The two groups had held talks on an infrastructure sharing deal in late 2011 as they attempted to bring about the first major collaboration between the Ambani brothers after they split the Reliance empire between themselves in 2005. But the negotiations did not make much headway at the time.

Then early last year (March 2012), RIL approached vendors with a potential contract to build over 1,00,000 towers over the next two years, moving away from its earlier 'asset-light' model and disappointing telecom tower companies that were looking for a tie-up.

For RCOM, elder brother Mukesh remains a major hope for increasing tenancy of its towers as a higher client base for its infrastructure is essential for the mobile phone company to sell stake in its tower arm.

Debt-laden RCOM has been looking to sell a stake in its tower arm to raise funds for over five years. However, suitors require tenants other than RCOM itself on the towers to offer a premium for the Anil Ambani-owned company.

RCOM had received a contract from Etisalat DB which has shut operations after India's apex court revoked licences.

The first signs of consolidation are emerging in the Indian telecom space with several new licence awardees shutting services after the apex court quashed 122 permits in February last year, and existing ones slowing expansion due to a cash crunch. This has left once attractive tower companies high and dry.

Reliance Industries-owned Infotel Broadband had invited bids earlier from tower operators for leasing around 26,000 towers across India for the first phase of its wireless broadband foray.

But if Infotel does meet its target of building 1,00,000 towers, there might not be any need for it to rent further capacity. Indus Towers, the country largest tower company, owns around 1,10,000 towers.

In May 2010, the Ambani brothers terminated a non-compete agreement that had been in place for five years.

Subsequently, Reliance Industries bought 95% in Infotel Broadband, the only company to win pan-India fourth generation airwaves in the auctions for Rs4,800 crore, in addition to payingRs12,848 crore for 20 MHz of spectrum in all 22 service areas.

At the time of Infotel's acquisition in mid-2012, RIL chairman Mukesh Ambani had said the company would follow an "asset light" telecom deployment strategy, meaning it would not build its own towers or rollout optic fibre cables to carry calls. But the thinking has changed somewhat along the way, added another source with direct knowledge of the development, who declined to be named.